Department of Water and Power City of Los Angeles. Electricity Outlook LA Chamber of Commerce Energy Committee. Planning to Meet the Challenge

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1 Department of Water and Power City of Los Angeles Electricity Outlook LA Chamber of Commerce Energy Committee Planning to Meet the Challenge May 2007

2 Renewable Energy Percentage Trends as reflected in 2007 POWER CONTENT LABEL First Quarter 2007 POWER CONTENT LABEL LADWP LADWP 2005 CA Eligible Renewable Energy in 2002 ~3% Renewable Energy 2007 Projections, 8% as noted Renewable Energy 2009 including Pinetree & UPC Wind ~ 12% ENERGY Power* Green Power** POWER MIX*** RESOURCES (projected) (projected) (for comparison) Eligible Renewable**** 8% 100% 5% -- Biomass & waste 1% - <1% -- Geothermal <1% - 4% -- Small hydroelectric 6% 25% 1% -- Solar <1% - <1% -- Wind 1% 75% <1% Coal 47% - 38% Large Hydroelectric 7% - 24% Natural Gas 29% - 33% Nuclear 9% - 0% Other <1% - 0% TOTAL 100% 100% 100% * 88% of LADWP Power is specifically purchased from individual suppliers. ** 100% of LADWP Green Power is specifically purchased from individual suppliers. *** Percentages are estimated annually by the California Energy Commission based on electricity sold to California consumers during the previous year. **** In accordance with Los Angeles City Council's action on for File No (RPS). For specific information about this electricity product, contact LADWP at DIAL-DWP. For general information about the Power Content Label, contact the California Energy Commission at or

3 LADWP RPS Master Plan LADWP plans to meet an RPS mandate of 20% by 2010 and the Mayor announced last week a new 35% RPS by 2020 and 35% GHG reduction by 2030 Eight general areas that make up the Master Plan Existing resources Consisting of Aqueduct, Hyperion digestion, Lopez microturbines, solar rooftops, landfill gas contracts, Wyoming Wind project, and purchases Planned resources Consisting of Pine Tree Wind Project, Powerex Small Hydro, and the ongoing solar rooftops program 2004 LADWP RFP Resource acquisition consisting of originally seven projects 2005 SCPPA RFP Resource acquisition consisting of seven projects 2006 SCPPA RFP Resource acquisition consisting of twenty-eight projects. LADWP 2007 RFP Resource development on LADWP owned properties or near LADWP transmission system issued RFP on January 30, Transmission Developments Consisting of the Pine Tree Transmission Line, new Tehachapi Transmission System, Green Path Project, and Southern Transmission System upgrade DSM Assumptions Use the Maximum Achievable Level

4 2007 DWP RFP Projects, after preliminary screening Preliminary Update DWP RFP review ongoing, preliminary results noted Further analyzing & evaluating proposals Inside CA Outside CA % 30% Resource Total % Type Total GWH of ENERGY Total Biomass % Geothermal % Solar % Wind % Total 10 4,315

5 MAP 4 MAP 2 MAP 3 P 1 LAR RESOURCE

6 AP 3 INYO-RINALDI TRANSMISSION LINE BARREN RIDGE SWITCHING STATION (PROPOSED) KRAMER JUNCTION HARPER DRY LAKE MOJAVE

7 Location of Proposed Renewable Energy Projects and LADWP Transmission Projected RPS by Energy Type (GWh) COB / NOB Powerex Potential Wind 26% 17% 4% 10% 32% 11% Small Hydro Biomass/MSW Wind Solar Geothermal purchases Small Hydro Wind Biomass Solar Geothermal SP-15 INYO- RINALDI Solar Rooftops BoS Waste Potential Solar LADWP3 Pine Tree McCULLOUG H- VICTORVILLE STS SCPPA6 / Solar LADWP5 / Wind Potential Solar and GREEN Wind PATH SCPPA4 / Wind Potential Solar Potential Geothermal Potential Wind PPM SW WY SCPPA3 / Wind

8 LADWP RPS Master Project List 2010 Technology PPA/Own COD MW GWh %DWP Sales Source Existing Small Hydro Small Hydro Own In service % Existing Hyperion Digester Gas Biomass Digester Own In service % Existing Lopez Microturbine Biomass Landfill Gas Own In service % Existing California System Purch Various Types PPA In service % Existing WM Bradley Biomass Landfill Gas PPA In service % Existing SCS Penrose Biomass Landfill Gas PPA In service % Existing Short-term Market Purchases Various Types PPA In service % Existing Solar Rooftop Program Solar Photovoltaics Own In service % Existing PPM SW Wyoming Wind PPA In service % 2005 SCPPA RFP Powerex - BC Hydro Small Hydro PPA In service % 2004 DWP RFP 344 1, % Transmission Line SP15 Solar Rooftop SB1 goal Solar Photovoltaics Own 12/31/ % DWP owned REC's? Water System Hydro Small Hydro Own 12/1/ % DWP Projects Terminal Island Fuel Cell Biomass Digester Gas Own 12/1/ % DWP/City of LA TI Renewable Energy (TIRE) Biomass Digester Gas Own 7/1/ % DWP/City of LA RenewLA-1,2,3,4 Waste to Energy Own % City of LA Biomass Proposal Biomass Landfill Gas PPA 12/31/ % 2007 DWP RFP Small Hydro Small Hydro PPA 11/1/ % 2006 SCPPA RFP Total SP , % McCullough-Victorville SCPPA6 Solar Trough PPA 6/1/ % 2005 SCPPA RFP Concentrated Solar Solar Own 12/1/ % 2007 JDG RFI SCPPA 13 Wind Own 12/31/ % 2006 SCPPA RFP Total McCullough-Victorville %

9 Inyo-Rinaldi Pine Tree Wind Wind Own 7/1/ % 2001 DWP RFP LADWP3 Wind PPA/Own 7/1/ % 2004 DWP RFP Aqueduct PP Improvements Hydro Own 4/1/ % Operational Upgrades Wind Proposal Wind PPA/Own 6/30/ % 2007 DWP RFP Concentrated Solar - Phase 1 Solar PPA/Own 12/31/ % 2007 DWP RFP Concentrated Solar - Phase 2 Solar PPA/Own 12/31/ % 2007 DWP RFP Concentrated Solar - Phase 3 Solar PPA/Own 12/31/ % 2007 DWP RFP Concentrated Solar Solar PPA/Own 12/31/ % 2007 DWP RFP Total Inyo-Rinaldi 974 2, % STS SCPPA3 / UPC Wind PPA/Own 3/31/ % 2005 SCPPA RFP Wind Proposal Wind PPA/Own 6/30/ % 2006 SCPPA RFP Geothermal Proposal Geothermal PPA/Own 3/31/ % 2007 DWP RFP Wind Proposal Wind PPA/Own 12/31/ % 2007 DWP RFP Total STS 625 1, % COB/NOB SCPPA 2 Phase 1 Wind Own 12/31/ % 2006 SCPPA RFP SCPPA 2 Phase 2 Wind Own 12/31/ % 2006 SCPPA RFP Wind Proposal Wind PPA/Own 12/31/ % 2007 DWP RFP Geothermal Proposal Geothermal PPA/Own 6/30/ % 2007 DWP RFP Total COB/NOB % Green Path SCPPA4 Wind PPA/Own 12/1/ % 2005 SCPPA RFP Solar Proposal Solar PPA/Own 12/31/ % 2007 DWP RFP Geothermal Geothermal Owned Jt. 5/30/ % SCPPA/IID/DWP Salton Sea Geothermal Geothermal Own 12/1/ % 2007 DWP RFP Total Green Path 345 1, % Grand Total 3,163 11, % Percentages expected by 2010 Percentage potential by % Already providing renewable resource 8.0% 6.5% High likelihood of providing the specified amount of renewable resources 11.7% 0.9% Marginal likelihood of providing the specified amount of renewable resources 0.9% 4.2% Projects from 2006 SCPPA RFP meeting initial screen 7.5% 9.4% 2007 DWP Renewable Energy RFP (preliminary) and JDG 2007 RFI 18.4% 29.1% 46.6%

10 Inyo - Rinaldi Line Upgrade Project 1. Reconductor Barren Ridge to Rinaldi w/ 1113 ACSS. 9 miles OWENS GORGE SCE INYO Wind MW 2008 COD To Cottonwood/Inyo 2. New line from Barren Ridge to Castaic w/ 1113ACSS. 81 miles Pine Tree 120 MW 2007 COD Pine Tree Barren Ridge COTTONWOOD 500MW WTG 68 miles Wind MW 2009 COD BARREN RIDGE Wind # 3 Substation CASTAIC 76 miles 71.6 miles OLIVE To Castaic SYLMAR To Rinaldi NORTHRIDGE 234 miles RINALDI

11 STS Background Information Major STS Components Intermountain Converter Station HVDC Transmission Line Adelanto Converter Station Adelanto Switching Station Transmission System 488 Mile +/-500 kv DC Transmission Line Transmission Capacity 1920 MW Transmission entitlement shares based on generation shares California Unit 1 & 2 Purchasers are able to use unused STS capacity

12 GREEN PATH (4) (7) (2) 12

13 Potential Impediments Uncertainty in Tax Credits or availability of Clean Renewable Energy Bonds CEQA completion prior to Governing Authority approval of Contract Manufacturing constraints wind turbines & solar tubes and glass Intermittent nature of wind & solar requires cautious integration into grid, more costly regulation California environmental process for new projects is lengthy, 12 to 24 months and appears to promote development out of state Renewables aren t perfect impacts to birds, bats, visual blight, aviation - FAA & military aircraft, noise, tourism & recreation, etc. Lack of trained labor pool to operate and maintain renewable facilities Environmental Justice issues and NIMBY lawsuits in urban settings MSW, landfill, biomass, etc.

14 PRESENT LADWP SOLAR PROGRAM INCENTIVE PAYMENTS LADWP Solar PV Incentive Program Budget and Projected Reservations and Expenses $12,000,000 $10,000,000 $8,000,000 $6,000,000 $4,000,000 $2,000,000 $- Jul-06 Sep-06 Nov-06 Jan-07 Mar-07 May-07 Jul-07 Amount $ Amount Reserved Amount Paid Budget Date

15 RECOMMENDED PROGRAM CHANGES NEEDED BY JANUARY 1, 2008 Proposed Incentive Rates for Step 1 Customer Type Base Incentive Rate ($/kwh) Base Incentive Approximate* ($/Wptc) Base Incentive Approximate* ($/W-AC CEC) LAMC or BIPV Supplement ($/kwh) Maximum Incentive Rate ($/kwh) Commercial $0.11 $3.40 $3.60 $0.01 $0.12 Govt. & Non-Profit $0.14 $4.30 $4.50 $0.02 $0.16 Residential $0.14 $4.30 $4.50 $0.02 $0.16 *$/Wptc installed values assume a PV system under nearly ideal conditions. i.e. 95% eff. Inverter, 1% shading, 34 deg tilt. Less than ideal systems will receive lower incentive amounts. W-AC CEC =Wptc x 0.95

16 Program OVERALL SUMMARY: FY07-08 Full Time Peak Energy Annual Energy Lifetime Energy Total Program Budget Equivalent Reduction Savings Savings Resource Cost Adminstrator LADWP LADWP ram ($1,000s) Staff (MW) (GWh) (GWh) (TRC) Cost (PAC) $/kwh $/kw ential Programs igerator Recycling Program $ $ $ 7 Distribution Program $ 5, $ $ 7 sumer Appliance Rebate Program $ 2, $ $ 4,9 -Income Refrigerator Program $ 25, $ $ 4,1 t of Sale (CRP) $ 2, $ $ 2,7 Buydown Program $ 3, $ $ 3 otal Residential Programs $ 40, ,569.6 $ $ 1,6 Residential Programs mercial Lighting Efficiency Offer $ 7, $ $ 7 ler Efficiency Program $ 2, $ $ 1,8 rmal Energy Storage Program $ $ $ 6 igeration Program $ 1, $ $ 1,0 tom Performance-Based Efficiency $ 2, $ $ 1,0 ll Business Direct Install $ 10, $ $ 2,0 Construction/LEED Incentive $ 2, $ $ 4,5 Bid Program $ 1, $ $ 2,5 o-commissioning $ 1, $ $ 3 otal Non-Residential Programs $ 29, ,637.4 $ $ 1,1 ral Program Support ram Administration $ 2, idential Audits and Workshops $ mercial Audits $ nical Assistance & Education $ 1, otal General Program Support $ 5, L ENERGY EFFICIENCY PROGRAM $ 75, ,207 $ $ 1,5 Administrator Cost Test compares NPV of all avoided cost benefits relative to LADWP program costs. esource Cost Test compares NPV of all avoided cost benefits relative to LADWP and customer costs.

17 Program Historic and Projected Energy Savings: LADWP Energy Efficiency Achievements and Projections (Annual GWH) Annual Savings Installed (GWH) FY06-07 is projected based on data to date. FY07-08 is proposed budgeted Fiscal Year

18 Program $80.0 $70.0 LADWP ENERGY EFFICIENCY Historic Expenditures and Projected Budgets $75 $60.0 $ millions $50.0 $40.0 $30.0 $28.2 $20.0 $19.1 $10.0 $10.9 $11.3 $12.1 $15.0 $11.0 $9.9 $7.7 $

19 Program Low Income Refrigerator Exchange CFL Distribution Sm Bus Direct Install Commercial Lighting Efficiency Offer Chiller Efficiency Program CFL Buydown Custom Performance New Construction/LEED Consumer Appliance Refrigeration Program Retrocommissioning DSM Bid FY06-07 Budget & Goals: FY06-07 EE Budget by Program Anticipate 50 MW of peak reduction and 275 GWh of annual energy savings. Overall cost effectiveness is $0.02/kwh. Eliminates the emission of nearly 200,000 tons of CO2 annually and more than 2 million tons over the life of the measures. Low Income Refrigerator Exchange Core programs are: Commercial Lighting, CFLs, and Low Income Refrigerators Other significant programs include Refrigeration, Custom Performance, Small Business Direct Install, Retro- Commissioning, and Chillers. Commercial Lighting Sm. Bus. Direct Install CFL Distribution